MyCC in a flap over chicken culling

The Malaysian Competition Commission (MyCC) has announced it is considering whether the culling of 5 million layer chickens by Malaysian farmers could involve a breach of the Competition Act 2010.

According to reports, Malaysian farmers typically cull about 10% of their older layer hens to make room for younger, more productive hens. However, farmers have recently been culling up to 10% more hens, apparently to reduce production costs. The culling has apparently resulted in a shortage of egg supply and a price increase of between 2 to 5 sen (less than one Australian cent) per egg.

The MyCC’s press release notes that a unilateral decision by a farmer to reduce production for cost management reasons may not be anti-competitive conduct, but may amount to an infringement if done in agreement with other farmers.

The Competition Act, which came into force on 1 January 2012, prohibits agreements between enterprises insofar as they have the object or effect of significantly preventing, restricting or distorting competition, including the object of limiting or controlling production. This prohibition is similar to the cartel provisions in the Australian Competition and Consumer Act 2010. The MyCC was set up last year to administer the Competition Act.

The MyCC has said it will gather further information before deciding whether to launch a formal investigation.